Helping a $1.5M Painting Business Save Big in Tax

Implement an accountable plan to reimburse owners and employees for personal assets used for business (e.g., mileage, home office, cell phones) to generate tax-free income for them and deductions for the company.

Track mileage diligently for personal vehicles used for business, using tools like MileIQ, and submit logs for tax-free reimbursement at IRS-approved rates.

Utilize home office or shop deductions for spaces exclusively used for business, either through a simplified square footage method or by allocating a percentage of mortgage, utility, and other costs.

Employ children (aged 7+) for legitimate business tasks at market-rate wages; consider setting up a separate sole proprietorship to avoid FICA taxes and allow for tax-free income up to the standard deduction, which can then be invested into a Roth IRA.

Explore 401k plans for aggressive retirement savings and tax deferral, and consider the mega backdoor Roth strategy to contribute additional funds into a Roth account for tax-free growth.

For company-owned vehicles, ensure proper depreciation and deduction of fuel and other related costs on the business's books.

If facing large tax bills, inquire about setting up an installment plan with the IRS, especially for amounts under $25,000, to manage payments.